2023 (2) TMI 946 - AT - Service Tax

Construction service for police housing exempt from service tax due to government ownership and personal use.

RD Contractor & Company Versus Commissioner of Central Excise & ST, Anand (Vice-Versa)

The Tribunal determined that the construction service provided to Gujarat State Police Housing Corporation Limited for building a residential complex for ... Levy of service tax - construction service provided to Gujarat State Police Housing Corporation Limited for construction of residential complex for the police staff - HELD THAT:- The Gujarat State Police Housing Corporation Limited is 100% owned by Government of Gujarat under the Ministry of Home Affairs therefore the same was held to be a government organization in various judgments. This very issue pertains to Gujarat State Police Housing Corporation Limited has been considered by this Tribunal in SHRI S. KADIRVEL VERSUS CCE & ST, TRICHY [2018 (6) TMI 926 - CESTAT CHENNAI] where it was held that The definition of residential complex specifically excludes construction undertaken for personal use and such personal use includes permitting the complex for use as residence by another person. The exclusion clause covers the construction activity undertaken by the assessee. In view of the above decision, which are directly related to the same service recipient, the issue is no longer res-integra - appeal allowed. Issues involved: Determining liability for service tax on construction service provided to Gujarat State Police Housing Corporation Limited for constructing a residential complex for police staff.Analysis:Issue 1: Liability for service tax on construction service provided to Gujarat State Police Housing Corporation LimitedThe Appellate Tribunal considered whether the service provided to the Gujarat State Police Housing Corporation Limited for constructing a residential complex for police staff is liable to service tax. The appellant's counsel cited various judgments to support their case, emphasizing the nature of the recipient organization. The Revenue's representative reiterated the findings of the impugned order. The Tribunal examined the ownership of the corporation and concluded that it is 100% owned by the Government of Gujarat under the Ministry of Home Affairs. Previous judgments, including those involving similar entities, were referenced to establish the corporation's status as a government organization. Notably, the Tribunal referred to specific cases like Sh. DH Patel and Sh. RN Dobariya vs. CCE, Surat, and Sh. S. Kadirvel vs. CCE & ST, Trichy, to support the decision. The Tribunal highlighted that the construction was intended for personal use, which excluded it from service tax liability. Consequently, the Tribunal allowed the assessee's appeal and dismissed the Revenue's appeal, emphasizing that the issue was no longer res-integra based on the cited judgments.This detailed analysis of the judgment provides a comprehensive overview of the issues involved, the arguments presented by both parties, and the Tribunal's reasoning based on relevant legal precedents.